Budget plan includes changes to KanCare prescriptions, end of 'health homes' program

Gov. Sam Brownback’s administration on Wednesday unveiled a budget proposal that would require new KanCare patients to try less-expensive drugs first and end a pilot program to improve the health of Kansans with severe mental illnesses.

In a presentation to members of the House and Senate committees that control spending, Budget Director Shawn Sullivan outlined how Brownback planned to cover a projected $190 million shortfall in the fiscal year 2017 budget. The proposal relies on a series of revenue transfers and $105.7 million in spending reductions to balance the budget and generate an ending balance of nearly $88 million.

About $24 million of the proposed reductions would come from the prescription drug change and elimination of the “health home” program for Kansans with severe mental health illnesses.

Another $14.4 million would come from other changes related to health care, on top of $11.6 million in reduced costs from Medicare Part B the state expects, for a total of about $50 million in lower health care spending in fiscal year 2017.

The proposal estimated the state could save $10.6 millionby allowing the three managed care organizations that administer Medicaid in Kansas by requiring providers follow a “step therapy" program when prescribing drugs. Doctors and patients would have to document that low-cost drugs didn't work before prescribing more expensive alternatives.

The proposed change wouldn't affect current KanCare recipients, Sullivan said. It would apply only to those who enroll after it's implemented.

The legislative KanCare oversight committee had recommended in December that the managed care organizations be allowed to use step therapy. The Legislature must approve a change to state law before the policy can be implemented, and Sullivan told lawmakers Wednesday he expected to have a bill to show them soon.

Rick Cagan, executive director of the Kansas chapter of the National Alliance on Mental Illness, said step therapy is a particular concern for people who take medications for a serious mental illness. A medication may be effective for one person with depression but not another, meaning that some people would have to wait longer to try the medications their doctors think would be most likely to help them, he said.

“This is a cookie-cutter approach which is going to exacerbate people’s illnesses, lengthen their recoveries and put them at unnecessary risk,” he said. “Individual prescribers need to have the full range of options.”

The health home change would save about $13.4 million by ending a pilot program designed to improve the health outcomes of KanCare recipients with “severe and persistent” mental illnesses by better coordinating their care, Sullivan said. A study found that the program improved the health of those who participated in the program, but not significanlty more than non-participants, he said.

“The improvements of outcomes they’ve had has been similar to a control group,” he said.

Sara Belfry, spokeswoman for the Kansas Department of Health and Environment, said the control group included KanCare recipients who were eligible for the health homes based on their diagnoses but who chose to opt out. Having the same diagnoses allowed for an “apples-to-apples” comparison based on their health care utilization, including acute care and home and community-based services, she said.

The federal government paid for 90 percent of the cost of the health homes for the first two years, Belfry said, but that rate is due to fall to 56 percent. The state would have had to pay about $13 million annually to continue the health home program starting in August, she said.

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